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RVF Portfolio - Damaged goods.

A helpful place to also put any annual reports etc, of your own portfolios
AJC5001
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Re: RVF Portfolio - Damaged goods.

#342340

Postby AJC5001 » September 23rd, 2020, 7:27 pm

ReallyVeryFoolish wrote: So about half of a very small selection (mostly three actually) of growth/TR investments was swapped for income generating stocks. You are quite right, it was a stupid thing in hindsight to do. We all have 20:20 hindsight. It's basically lost me around £100k in capital this year. Ouch.

RVF


What would you have gained/lost if you hadn't made the swap?

Adrian

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Re: RVF Portfolio - Damaged goods.

#342342

Postby tikunetih » September 23rd, 2020, 7:33 pm

ReallyVeryFoolish wrote:without apportioning any blame at all here, pressure from spouse for income generating investments. So about half of a very small selection (mostly three actually) of growth/TR investments was swapped for income generating stocks.


Bad luck.

Perhaps have said spouse write out 100 times: "Money is fungible".

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Re: RVF Portfolio - Damaged goods.

#342343

Postby ReallyVeryFoolish » September 23rd, 2020, 7:34 pm

AJC5001 wrote:
ReallyVeryFoolish wrote: So about half of a very small selection (mostly three actually) of growth/TR investments was swapped for income generating stocks. You are quite right, it was a stupid thing in hindsight to do. We all have 20:20 hindsight. It's basically lost me around £100k in capital this year. Ouch.

RVF


What would you have gained/lost if you hadn't made the swap?

Adrian

I wouldn't have lost anything. The investments I foolishly sold to by the income investments I mentioned above were (mostly) Smithson IT, Blue Whale Growth Fund and Fundsmith. Fortunately, I held onto about half of my holdings in those three investments. They have all continued to perform well.

RVF

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Re: RVF Portfolio - Damaged goods.

#342345

Postby ReallyVeryFoolish » September 23rd, 2020, 7:35 pm

tikunetih wrote:
ReallyVeryFoolish wrote:without apportioning any blame at all here, pressure from spouse for income generating investments. So about half of a very small selection (mostly three actually) of growth/TR investments was swapped for income generating stocks.


Bad luck.

Perhaps have said spouse write out 100 times: "Money is fungible".

Quite.

RVF

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Re: RVF Portfolio - Damaged goods.

#342391

Postby mao44 » September 24th, 2020, 12:23 am

ReallyVeryFoolish wrote:
dealtn wrote:
ReallyVeryFoolish wrote: It seemed sensible to move about half my growth/TR portfolio into typical UK income stocks ahead of retirement.


Why? (Genuine non provocative question)

Was it just an easier way to receive a higher running income or some other motive? I might be the outlier here but I wouldn't see changing "strategy" as sensible. Wondering what your motivation was, and maybe what others think.

Basically yes, as you suggested, and without apportioning any blame at all here, pressure from spouse for income generating investments. So about half of a very small selection (mostly three actually) of growth/TR investments was swapped for income generating stocks. You are quite right, it was a stupid thing in hindsight to do. We all have 20:20 hindsight. It's basically lost me around £100k in capital this year. Ouch.

RVF


Have you sold the aforementioned stocks? If not, all is not lost!

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Re: RVF Portfolio - Damaged goods.

#342417

Postby ReallyVeryFoolish » September 24th, 2020, 8:17 am

mao44 wrote:
ReallyVeryFoolish wrote:
dealtn wrote:
Why? (Genuine non provocative question)

Was it just an easier way to receive a higher running income or some other motive? I might be the outlier here but I wouldn't see changing "strategy" as sensible. Wondering what your motivation was, and maybe what others think.

Basically yes, as you suggested, and without apportioning any blame at all here, pressure from spouse for income generating investments. So about half of a very small selection (mostly three actually) of growth/TR investments was swapped for income generating stocks. You are quite right, it was a stupid thing in hindsight to do. We all have 20:20 hindsight. It's basically lost me around £100k in capital this year. Ouch.

RVF


Have you sold the aforementioned stocks? If not, all is not lost!

The loss has not been crystallised, it's a paper loss. Yes, I am sitting hoping for recovery. I am sceptical we will get back to where we were anytime soon (we're still well down on 1999 levels with the FTSE) and dividend distribution is likely to be far less generous. But my good fortune is that, now retired, I can still sit and wait.

RVF

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Re: RVF Portfolio - Damaged goods.

#346598

Postby ReallyVeryFoolish » October 9th, 2020, 8:31 pm

Not quite as deep red on the portfolio balance sheet. And the last few days have been kinder to my portfolio. Since I retired at the end of July, I have been able to commit some new money to the portfolio. Including an approx £4,000 transfer in of AVC from an ex-Equitable Life plan, and an ISA subscription. Altogether, approx £33,000 new money has been thrown into the damaged goods portfolio repair plan. Even so, the portfolio is still £46,000 below it's highest valuation earlier this year. There's bound to be more bumps in the road, Brexit, US election, pandemic etc. But as long as my Plan C part time consulting work continues for a while longer, and hopefully an improved market, I look forward to being back where I started in time. It's been a very painful lesson learned this year, but the plan continues to work. And that's the purpose of this thread, have a plan, stick to it, adjust it to reflect the changing landscape, don't give up.

RVF

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Re: RVF Portfolio - Damaged goods.

#346768

Postby MaraMan » October 10th, 2020, 4:53 pm

Good luck with it, I am sure with time it will be repaired. I also learned a painful lesson. I held too many income shares which got decimated, but I also held some growth shares (SMT, FS, MONKS, Amazon) which provided some balance, but not enough. Anyway I restructured most of the ISA portfolio and reduced dramatically the income shares and moved mostly into growth. Anyway to cut a short story shorter earlier this week we celebrated as our portfolio value is now above where it started the year, in fact its up by 2% overall, despite the SIPP being in drawdown and still taking the remaining yield on the ISA. The SIPP lead the way with a 13% gain this year, but as you can tell the ISA lagged behind as this was where the income shares were (the SIPP is larger than the ISA).

I reduced my holdings in Amazon at it's peak and sold a third of my SMT holding as it had become disproportionately large, these made good contributions to the SIPP performance.

Anyway all the best
MM

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Re: RVF Portfolio - Damaged goods.

#346812

Postby Howard » October 10th, 2020, 8:02 pm

ReallyVeryFoolish wrote:Not quite as deep red on the portfolio balance sheet. And the last few days have been kinder to my portfolio. Since I retired at the end of July, I have been able to commit some new money to the portfolio. Including an approx £4,000 transfer in of AVC from an ex-Equitable Life plan, and an ISA subscription. Altogether, approx £33,000 new money has been thrown into the damaged goods portfolio repair plan. Even so, the portfolio is still £46,000 below it's highest valuation earlier this year. There's bound to be more bumps in the road, Brexit, US election, pandemic etc. But as long as my Plan C part time consulting work continues for a while longer, and hopefully an improved market, I look forward to being back where I started in time. It's been a very painful lesson learned this year, but the plan continues to work. And that's the purpose of this thread, have a plan, stick to it, adjust it to reflect the changing landscape, don't give up.

RVF


I read your posts today and am glad that you (and the market) have substantially repaired your portfolio. And your plan C looks brilliant! Congratulations.

Surprisingly, I experienced the opposite when I retired in 2001. My portfolio then was dominated by growth companies and growth investment trusts. The damage the market drop caused to my portfolio seemed huge. Many investments went to 10% of their value in less than a year and I “lost” an amount similar to the value of an average house at the time. (Some may remember Logica, Misys, Baltimore, Trafficmaster, Telewest, Vodafone and the other culprits! :( )

From memory, the companies that suffered less and recovered well were utilities, food, beverages, healthcare, tobacco etc. The "essentials" of life with regular turnover not affected by the economic cycle.

Ironically the experience in 2000/01 changed my approach and I moved a significant portion of my portfolio away from growth shares and bought more income generating stocks and quite a few of Luniversal’s “basket of seven” income ITs.

Whilst a few of my income shares have dropped a lot recently, they paid such good dividends over the last 17 or 18 years that they paid for themselves some time ago! And some HYP shares like IGG have done amazingly well, others like National Grid, Pennon, Unilever, Reckitt, Diageo, United Utilities, Intercontinental Hotels and even Tesco haven’t done badly over the 15 years or so since I bought them. Of course, I too hold Lloyds Bank and one or two other shockers.

My attitude after 2000 was to ignore advice to have a concentrated portfolio. I am probably far too diversified with over 100 holdings (and vastly more if one takes into account the contents of ITs and OEICs). This may mean that my portfolio has not grown as fast as it might. But it has appreciated at around 8% a year (after tax) and it is much less volatile than a more concentrated portfolio. It is currently down 5% from its all-time high.

My conclusion is that it is not a good idea to completely leave the income sector. It may have its day again. The bit of the HYP approach I like is “strategic ignorance”. Too many investors claim they can predict which company is better run than another - and remembering their posts it’s often instructive to see how wrong the predictions were.

And of course, Covid comes along and shows that none of us could predict the future!

One lucky decision of both of us was to invest in Fundsmith. Terry rightly predicted that companies supplying essentials would be survivors. So far he’s right and his fund has grown to be my biggest investment.

So hopefully you may find that in a few years time your portfolio hiccup will be just that!

And do make the most of your retirement!

regards

Howard

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Re: RVF Portfolio - Damaged goods.

#346815

Postby ReallyVeryFoolish » October 10th, 2020, 8:46 pm

Thank you Howard, what a difference we are experiencing now compared to when you first retired. I haven't given up entirely on income stocks. Some of my holdings are way too far underwater to give up on them. I have in fact added to my income portfolio. HFEL for international income and NG, buying back in at a lower post Corbyn price.

It seems the one very important thing we have in common has been a plan. And that's what my story is really about.

Thank you for your perspective and kind words. I intend to make the very most of the time I have available in good health. It's important that Plan C doesn't escalate beyond my present commitment of 8 hours a week. I've done enough, now it's time for the energy industry to manage without me. I am sure they'll manage just fine.

RVF

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Re: RVF Portfolio - Damaged goods.

#346824

Postby Dod101 » October 10th, 2020, 9:58 pm

Just like growth shares, some income shares have done quite well. It is a matter of getting a balance and not being too committed to one or the other or for that matter being too ambitious with either. All very boring.

I would assume that with his 100 plus holdings Howard has got it pretty well sussed but I suspect he has got a version of a tracker. Might be cheaper just to buy one. He cannot possibly monitor all 100 plus holdings.

Dod

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Re: RVF Portfolio - Damaged goods.

#346829

Postby Howard » October 11th, 2020, 12:15 am

Dod101 wrote:Just like growth shares, some income shares have done quite well. It is a matter of getting a balance and not being too committed to one or the other or for that matter being too ambitious with either. All very boring.

I would assume that with his 100 plus holdings Howard has got it pretty well sussed but I suspect he has got a version of a tracker. Might be cheaper just to buy one. He cannot possibly monitor all 100 plus holdings.

Dod


You are right I can't monitor all my holdings.

I do have them all in a portfolio tool on the web so I can look at their progress and have sorted them roughly into different styles (eg my SIPP used to be mainly income holdings, but I'm now moving towards total return because eventually it will be an IHT free gift to one of my children).

I keep trying to find reasons to consolidate by selling a few shares and increasing holdings in ETFs which give international exposure. The problem is that the shares I sell often go up afterwards! For example I had a fairly significant holding in AstraZeneca. Read an article by Terry Smith who criticised their accounting methods and said their profits were overstated a couple of years ago. So I sold and they have not looked back since!

Looking ahead, hopefully Reallyveryfoolish will soon find his portfolio has grown significantly and he then has to think about how he will pass it on to the next generation. But that's another thread!

regards

How

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Re: RVF Portfolio - Damaged goods.

#346842

Postby Dod101 » October 11th, 2020, 7:59 am

I have a mere 31 holdings and frankly tend not to pay much attention to Terry Smith although there is no gainsaying that he has done very well with Fundsmith and to a latter extent Smithson. I hold the latter. TS is too dogmatic for me to be entirely comfortable with his views.

I tend to respect and read what James Anderson of Scottish Mortgage and Nick Train have to say although I do not often follow their choices. Anderson is more of a 'theme' man anyway whereas Nick Train is very much a stockpicker.

My priority in investing is for income but I hold few out and out HYP shares and those I do hold I am mostly selling down. The shares I hold for growth I top slice when I can and put them in to modest dividend growing shares and I do not mind whether individual shares or ITs but I hold no ETFs or OEICs.

I have not touched my SIPP in terms of drawdown for at least a couple of years not so much for the benefits of IHT savings as simply that I tend to use it as last resort income because I do not like paying tax if I can avoid it.

Dod

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Re: RVF Portfolio - Damaged goods.

#346924

Postby richfool » October 11th, 2020, 1:24 pm

MaraMan wrote:Good luck with it, I am sure with time it will be repaired. I also learned a painful lesson. I held too many income shares which got decimated, but I also held some growth shares (SMT, FS, MONKS, Amazon) which provided some balance, but not enough. Anyway I restructured most of the ISA portfolio and reduced dramatically the income shares and moved mostly into growth. Anyway to cut a short story shorter earlier this week we celebrated as our portfolio value is now above where it started the year, in fact its up by 2% overall, despite the SIPP being in drawdown and still taking the remaining yield on the ISA. The SIPP lead the way with a 13% gain this year, but as you can tell the ISA lagged behind as this was where the income shares were (the SIPP is larger than the ISA).

I reduced my holdings in Amazon at it's peak and sold a third of my SMT holding as it had become disproportionately large, these made good contributions to the SIPP performance.

Anyway all the best
MM

I too reduced my exposure to income focused IT's and increased my exposure to growth trusts earlier this year, primarily as a result of the Covid meltdown and the prospect of falling dividend yields and an increased emphasis on technology stocks. That included discarding a couple of UK IT's including Temple Bar, reducing JETI, adding to FGT and Mid Wynd, and adding new positions in: SMT, Monks, USA and BGEU. I have also since built up holdings in Asia Pacific trusts like JAGI, SOI and PHI.

Whilst I enjoyed having dividend Income to reinvest, and liked the idea of having a bird in the hand now, rather than waiting for the uncertainty of two in the bush later (which could easily be taken away), I realised that income wasn't essential to me, so why chase it.

Also, early in the meltdown I was unnerved by the dramatic fall s in the markets, and fearing Armageddon, I sold between a third and a half of a couple of my existing IT holdings on the way down, and then when things didn't sound so bad I managed to buy them back at an even lower price before the recovery got under way. E.g. I sold a proportion of JGGI @ £2.75 then bought them back @ £2.29 a week later. So currently JGGI is one of my best performers.

I do still hold a number of trusts for income and for diversity - e.g. infrastructure, renewables. Plus a gold miner.

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Re: RVF Portfolio - Damaged goods.

#346928

Postby ReallyVeryFoolish » October 11th, 2020, 1:47 pm

Thanks for the thoughts. As my portfolio recovery plan matures, I envisage a much more international focus and an income/growth emphasis to be likely. Rather than focus on just yield (been awful for me) or just growth (lucky to have been pretty successful) a lower yield with some growth seems a sensible way to fill the gap. I have in mind JGGI and SAIN *** for new money, though I definitely dislike the current premium, especially on SAIN. But if it's the right way to go, I may have to hold my nose when I click the buy button. I do have a small amount of uninvested cash in the SIPP part of the portfolio and that's likely to go into HFEL tomorrow to build on a position I have opened since end of July. Again, more international diversity for a future income stream. I think I have about eighteen months before I need to draw any income from ISA/SIPP holdings. And even then, I don't expect it to be essential to live a reasonable lifestyle. More likely travel plans that are presently on hold to be funded that way.

*** Is anyone aware of close OEIC equivalents to those two ITs? Thanks.

RVF


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